Borrower Rights and Responsibilities

An overview of your rights and responsibilities as a student loan borrower.

You must notify the school (or the organization) that holds your loan if you graduate, withdraw from school or drop below half-time status; change your name, address or Social Security number; or transfer to another school.

Borrower Responsibilities

When you take out any student loan, you have certain responsibilities. A few of them are listed below:

When you sign a promissory note, you're agreeing to repay according to the terms of the note. This note is a binding legal document. This commitment to repay means that, except in cases of cancellation, (see the Federal Student Guide, published by the U.S. Dept. of Education) you will have to pay back the loan--even if you do not complete your education, are not able to get a job after you complete the program, or you are dissatisfied with, or do not receive the quality of education you received.

Think about what this obligation means before you take out a loan. If you do not pay back your loan on time or according to the terms in your promissory note, you may go into default, which has serious consequences.

You must make payments on your loan even if you do not receive a bill. Billing statements (or coupon books) are sent to you as a convenience, but not receiving them does not relieve you of your obligation to make payments.

Even though you may have applied for a deferment, you still must continue to make payments until your deferment is processed. If you do not, you may end up in default. You should keep a copy of any deferment request form you may have, and you should document all contacts with the organization that holds your loan.

Before you receive your first disbursement, you must attend an entrance interview and, before you leave school, you must attend an exit interview.

Borrower Rights

You have certain rights as a borrower. Listed below are some of them:

You have the right to a grace period before your repayment period begins. (Your parents do not receive a grace period for a Federal PLUS loan.) Your grace period begins when you leave school or drop below half-time. The exact length of your grace period is shown on your promissory note.

You must be given a loan repayment schedule, which lets you know when your first payment is due, and the number, frequency, and amount of all payments.

You must be given a list of deferment and cancellation conditions and the conditions under which the Department of Defense will repay your loan.

You must be notified when your loan is sold if the sale results in your making payments to a new organization. The old and new organizations must each notify you of the sale, the identity of the new organization holding your loan, the name and address of the organization to which you must make payments, and the telephone numbers of both old and new organizations.

Department of Defense MOU Requirements for Tuition Assistance 

Before offering, recommending, arranging, signing-up, dispersing, or enrolling service members for private student loans, CNM provides service members access to an institutional financial aid advisor or financial aid staff member who will make available appropriate loan counseling, including:

  • Providing a clear and complete explanation of available financial aid, including Title IV of the Higher Education Act of 1965, as amended.
  • Describing the differences between private and federal student loans to include terms, conditions, repayment, and forgiveness options.
  • Disclosing CNM's student loan Cohort Default Rate (CDR), the percentage of our students who borrow, and how its CDR compares to the national average. If CNM's CDR becomes greater than the national average CDR, we will disclose that information and provide the student with loan repayment data.
  • Explaining that students have the ability to refuse all or borrow less than the maximum student loan amount allowed.